- Fall in demand continues
- Cost-cutting measures are taking effect
- Free cash flow rose to €39 million
- Group equity ratio improved from 45 % to 47 %
Performance
The FUCHS PETROLUB Group was unable to defy the recession in the first quarter of 2009 and, like the global lubricants market, recorded a significant drop in demand. Revenue was€278.5 million (350.7), a fall of 20.6 % against the very strong first quarter of 2008.
As a result of the decline in sales revenue, the gross profit of €95.3 million (128.3) fell by €33.0 million or 25.7 %. The gross margin was 34.2 % (36.3). In the immediately preceding fourth quarter this figure was 32.1 %. Cost reductions in all areas partly compensated for the fall in gross profit to a certain extent: In particular, expenses relating to sales and administration were reduced, while R&D expenses were largely maintained at the previous year's levels.
Earnings before interest and tax (EBIT) amounted to €26.5 million (48.7), 45.6 % less than in the previous year. The EBIT margin, that is the EBIT in relation to sales revenues, is 9.5 % (13.9). The comparison with the fourth quarter of 2008 shows that the gross margin is growing and our cost reduction measures are taking effect. After income taxes of €7.6 million (14.8), this leaves a net profit of €16.2 million (32.1). Earnings per ordinary share amount to €0.67 (1.27), while earnings per preference share are €0.69 (1.28).
Despite the difficult economic conditions, the net assets and financial position of the Group remains stable. It was even possible to increase the equity ratio to 47.0 % (44.8 % at the end of 2008).
Cash flow development was pleasing, primarily due to the reduction in inventories: The Group generated a free cash flow of €39.2 million in the first quarter of 2009. This allowed financial liabilities to be reduced and the liquidity cushion to be increased.
Employees
As of March 31, 2009, the workforce of the FUCHS PETROLUB Group consisted of 3,730 employees worldwide;
this is 125 less than at the beginning of the year. The drop in staff numbers in all regions is a reflection of the initial measures taken to adapt to the considerable decline in the Group's global sales revenues.
Outlook
There are currently no indications of a significant improvement in the economic situation and therefore in the demand for lubricants. In the first quarter, the FUCHS PETROLUB Group has taken the necessary measures required to secure its earning power in this environment while at the same time equipping it for the future. These measures include both expanding and securing profitable revenue sources and continuing strict cost management, while at the same time paying increasing attention to the cash flow. The above measures and the continuation of the investment in the specialty business, research and development and growth markets ensure the Group remaining on a firm footing for the future.
The extent to which the economic development will allow the following quarters to see similar or even higher earnings before interest and tax than that achieved in the first quarter of 2009 remains to be seen.
The first quarter of 2009 at a glance
| (in € million) | 1-3/2009 | 1-3/2008 |
|---|---|---|
| Sales revenues (1) | 278.5 | 350.7 |
| Europe | 177.9 | 244.0 |
| North and South America | 44.8 | 48.3 |
| Asia-Pacific, Africa | 61.2 | 66.3 |
| Consolidation | -5.4 | -7.9 |
| Earnings before interest and tax (EBIT) | 26.5 | 48.7 |
| Net profit for the first quarter | 16.2 | 32.1 |
| Earnings per share in € | ||
| Ordinary share | 0.67 | 1.27 |
| Preference share | 0.69 | 1.28 |
| Gross cash flow | 20.1 | 35.3 |
| Capital expenditure (2) | 7.2 | 8.0 |
| Employees (as at March 31) | 3,730 | 3,829 |
(1) By company location
(2) In property, plant and equipment and intangible assets
Mannheim, May 5, 2009
FUCHS PETROLUB AG
Öffentlichkeitsarbeit
Friesenheimer Str. 17
68169 Mannheim
Germany
Tel.: ++49 (0) 621 3802-124
The information below can be accessed at the following web addresses:
Press release:
www.fuchs-oil.com
Quarterly report for the first quarter of 2009:
www.fuchs-oil.de/fileadmin/fuchs_upload/pdf_addons/QR2009/QB14e.pdf
Press photos:
www.fuchs-oil.de/pressphotos.html
Important note
This press release contains statements about future developments that are based on assumptions and estimates by the management of FUCHS PETROLUB AG. Even if the management is of the opinion that these assumptions and estimates are accurate, future actual developments and future actual results may differ significantly from these assumptions and estimates due to a variety of factors. These factors can include changes in the overall economic climate, changes to exchange rates and interest rates, and changes in the lubricants industry. FUCHS PETROLUB AG provides no guarantee that future developments and the results actually achieved in the future will agree with the assumptions and estimates set out in this press release and assumes no liability for such.